Update: Gallerist Goes to Prison on Art Forgery Charges

On July 6 Ely Sakhai, owner of the Exclusive Art gallery, New York, was sentenced by a Manhattan federal judge to 41 months in federal prison and ordered to restitute $12.5 million to unsuspecting buyers caught in his scheme. Sakhai and his office manager Houshi Sandjaby, who was sentenced to three years’ probation, pleaded guilty

NEW YORK—On July 6 Ely Sakhai, owner of the Exclusive Art gallery, New York, was sentenced by a Manhattan federal judge to 41 months in federal prison and ordered to restitute $12.5 million to unsuspecting buyers caught in his scheme. Sakhai and his office manager Houshi Sandjaby, who was sentenced to three years’ probation, pleaded guilty last December to mail and wire-fraud charges for their involvement in the far-reaching art forgery scheme that spanned nearly two decades (see ANL, 3/30/04). Sakhai also was ordered to forfeit 11 paintings believed to be authentic versions of works he had forged.

According to Sakhai’s indictment and his guilty plea, Sakhai purchased authentic artworks at auction by such artists as Marc Chagall, Paul Gauguin and Pierre-Auguste Renoir and then hired artists to make forgeries of the same works, which he then sold to clients in New York, Paris and Japan, often with certificates of authenticity. On at least two occasions, prosecutors say, he misled potential buyers into believing the forged works were pledged as collateral for Citibank loans and that Citibank was involved in the sales.

The scheme, which involved more than 25 pieces, began to unravel when the authentic artworks and their fraudulent versions made simultaneous appearances on the market. Sakhai often waited years to resell the authentic works through public auction without disclosing his previous sales of one or more forgeries of the same work.

Christie’s and Sotheby’s, for example, discovered that they were offering the same work by Gauguin, Vase de fleurs (Lilas), 1885, after the catalogues for their May 2000 sales were published. An expert who examined both paintings determined that the Gauguin consigned to Sotheby’s by Sakhai was authentic and it sold at auction for $310,000. The Gauguin consigned to Christie’s by a Tokyo art collector, who had purchased the work from Sakhai, was determined to be a fake and withdrawn from the sale.

Sakhai and Sandjaby often directed the forgers they hired to copy the markings on the backs of the original canvases and frames, apply a special coating to the finished forgeries, and construct and alter the frames to make them appear to have been made decades earlier, prosecutors said.